An attorney for a Santa Fe group long critical of Public Service Company of New Mexico hammered away Thursday at an Avangrid executive over the service record of its subsidiary in Maine.
New Energy Economy lawyer Tim Davis spent much of his approximately 90 minutes with Avangrid President Robert Kump on penalties and problems faced by Central Maine Power.
The topic arose during the second day of evidentiary hearings before the Public Regulation Commission on whether PNM should be allowed to merge with Connecticut’s Avangrid and its parent firm, Spain-based Iberdrola. The hearings are being conducted by Zoom.
The hearings are expected to continue into next week. The commission will rule on the merger proposal this summer or fall, although an immediate appeal to the New Mexico Supreme Court is likely.
After Bernalillo County legal representative Jeff Albright posed questions to Kump, Davis launched into his turn.
“I’d like to start by talking about Maine,” Davis said to Kump, who also is deputy chief executive officer of Avangrid.
Service issues have given critics of the merger proposal, including New Energy Economy, a key element with which to challenge the plan. PNM contends Avangrid and Iberdrola could assist the New Mexico company with financing and know-how in leaping into the coming renewable energy era.
Commission hearing examiner Ashley Schannauer, a quasi-judge in the merger proposal, spotlighted Avangrid service issues about three months ago.
During a meeting at that time, Schannauer scolded the company for being less than forthcoming about some $25 million in fines and penalties its subsidiaries in the northeastern United States faced over a 16-month stretch.
Davis whacked away at Kump, asking about penalties against Central Maine Power for transmission, operations and reliability problems. In particular, he referred to a management audit produced this year from a Pennsylvania consultant, the Liberty Consulting Group.
Avangrid had tried to keep the management audit out of the hearing, but Schannauer formally ruled it was appropriate fodder for questioning. Davis read from the audit that Avangrid had been criticized for emphasizing cuts and limiting resources to meet earnings expectations.
“That’s what it says,” Kump responded, “and I would say I disagree with that conclusion by Liberty.”
Davis also cited findings of management turnover and inadequate oversight. The audit, he said, noted an acquisition of PNM would further complicate Avangrid’s management challenges.
Kump said the management audit also made some positive findings. “I think we need to be careful that we don’t cherry-pick the negatives,” he said.
In a separate audit, Davis said, Liberty looked at a Central Maine Power billing system installed in 2017. He said Maine’s utility commission found the rollout of that system was handled with “imprudence.”
Kump responded his company admitted to customers that it had failed to staff the call center adequately to handle the many phoned-in complaints. There also were some problematic changes to the bills’ appearance, he said.
But Kump said many of the consumers accused Central Maine Power of overbilling, and inspections found “the bills were in fact accurate.”
Nevertheless, Davis said Maine’s utilities commission ordered a $9.9 million reduction of the return on equity — a measure of shareholders’ stake in the company — for inadequate customer service and management failings.
Davis also described Avangrid and Central Maine investing many millions of dollars in a political action committee to help defeat a proposed referendum on a power transmission line through western Maine.
Kump said the political action committee is used to protect the companies’ interests and helped find fraudulent activities on the part of those seeking to place the referendum on the ballot. The proposed referendum was found to be unconstitutional last year.